Question
1. Suppose there is $200 billion of currency in circulation, $600 billion in deposits, $30 billion in excess reserves, and $70 billion in required reserves.
1. Suppose there is $200 billion of currency in circulation, $600 billion in deposits, $30 billion in excess reserves, and $70 billion in required reserves. Calculate the following:
a. Reserves
b. Required Reserve Ratio
c. Monetary Base
d. Money Multiplier
e. Money Supply
2. What is the market for lemons? Explain how it leads to a market failure. Is this an example of Adverse Selection, Moral Hazard, or the Principal/Agent problem? Explain.
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Financial Accounting A Focus On Interpretation And Analysis
Authors: Richard F Kochanek, A Douglas Hillman
7th Edition
1111061750, 9781111061753
